Commentary: “A serious setback for cleaning up big oil”

Author: Marti Flacks and Alison Newman Hood on Foreign Affairs (USA), Published on: 10 January 2018

9 Jan 2018

In September 2011, President Barack Obama announced that the United States would be implementing the Extractive Industries Transparency Initiative (EITI), a global effort to clean up the oil, gas, and mining sectors. The goal was to bring transparency and accountability to industries in which mismanagement and corruption too often undermine development, increase poverty, and fuel conflict…

Now, the Trump administration is threatening to upend all the progress that has been made to date. It announced on November 2 of last year that the United States would halt its domestic implementation of EITI (known as USEITI). Although the United States will continue its role in setting the global EITI rules, it has refused to adopt the same standards it encourages others to maintain. This means that it is not only undermining its global leadership on this issue, but also depriving Americans of an important transparency tool, one that enables them to hold their government accountable for collecting revenues related to the development of the nation’s resources…

…Had USEITI been fully implemented…it could have played an important role in helping citizens understand certain implications of the major U.S. tax overhaul late last year. Limited public information about tax payments by U.S. companies in the extractives sector, including reporting through USEITI, suggests that the industry is paying a rate far lower than the typical corporate rate of 35 percent. It has been reported that the new Republican tax law will deliver even more favorable treatment to the upstream oil and gas sector by allowing them to deduct certain expenses. It’s thus important to raise the question: would that outcome have been different if members of Congress and their constituents had had access to better information about what companies were (or weren’t) already paying in federal taxes?...

…Americans must resist the argument that EITI and other natural resource transparency initiatives help only poor people in poor countries run by corrupt governments. These are powerful tools that hold the U.S. government and companies accountable and ensure that U.S. citizens receive what is owed them from their nation’s resource bounty.

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Related companies: ExxonMobil